On the arcing when you attempt to crank there’s a couple possiblies:
1 – Short circuit inside the starter. The starter will need to be removed/opened to locate the problem.
2 – The starter pinion (the “bendix”) has jammed into the flywheel ring gear. You can free it by manually rotating the crankshaft backward a bit (put the transmission in 5th and rock the tractor backward a few inches), or by loosening the starter bolts and pulling on and wiggling the starter until the bendix returns, then retightening the bolts.
If you discover it IS a jammed bendix it means the bendix and/or the ring gear are worn. And it WILL jam again!
The only permanent fix is to replace the worn part(s).
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The discharge problem when the battery is left connected most likely is the cutout relay inside the voltage regulator has stuck closed.
To check, note the ammeter reading with the engine stopped and the battery connected. If the ammeter shows a slight discharge, then returns to center when you disconnect the wire from the BAT terminal at the regulator, the regulator is bad.
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